MACD Almost Gives Bearish Signal

Investors looking to I-T Bill, which is to be tabled on Thursday. On the upside, if it closes above session’s high of 23,145 points, it will be positive. The 23,283 is the immediate resistance, above which the index may test 23,500-600 zone

The equity indices traded highly volatile and finally closed on a flat note. NSE Nifty registered 26.55 points or 0.12 per cent fall and closed at 23,045.25 points. The PSU Bank index is the top gainer with 0.84 per cent. The Metal and FinNifty gained half a per cent each. On the flipside, the Realty index is the top loser with 2.74 per cent. The Oil and Gas, Auto, CPSE, IT, Healthcare, Pharma and PSE indices declined over a half per cent. The India VIX is up by 0.17 per cent to 14.90. The market breadth is negative as 1,685 declines and 1,154 advances. About 611 stocks hit a new 52-week low, and 271 stocks traded in the lower circuit. Reliance, BSE, HDFC Bank, Zomato and Mazdock were the top trading counters in terms of value.

After a highly volatile session, the Nifty recovered smartly from the day’s low. But it closed flat to negative. It declined below the previous day’s low in the opening session. The index declined for the sixth straight day. It formed a hammer candle after almost tested the previous major low. It was missed by just 10 points. Now, as long as this session’s low of 22,798 is protected, the probability of continuing the recovery is higher. The volumes were higher than the previous day, but, as the decline is limited to 0.12 per cent, the index escaped the distribution day. The RSI shifted its range into the bearish zone during the day, but finally, it closed on the 40 support. The MACD has almost given a bearish signal. Nifty has recovered 346.35 points from the first-hour low and formed a Doji candle. The banking stocks led the recovery. The decline in the first is with higher volume, and the recovery was with a lower volume. The Open Interest indicates the short covering. The Income-Tax Act bill is to be tabled on Thursday. This news has influenced the recovery. On the upside, if the Nifty closes above session’s high of 23145, it will be positive. The 20DMA of 23283 is the immediate resistance. Above the 20DMA, the index may test 23500-600 zone. In a nutshell, this session’s high and low are key resistance and support for the next two trading sessions.

(The author is partner, Wealocity Analytics, Sebi-registered research analyst, chief mentor, Indus School of Technical Analysis, financial journalist, technical analyst and trainer)